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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

To Unleash an Infrastructure Boom, Turn to the Private Sector

by and Tyler Moran | October 16th, 2014 | 03:32 pm

With the world economy suffering, neither monetary nor fiscal nostrums are giving much relief. Easy money has boosted bond and equity prices, as well as housing values, but it has done little to lift wages or employment. Fiscal expansion is constrained by politics, not economics. Debt and deficit hawks are ascendant in Germany and elsewhere, […]

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Jack Lew Tilts at Windmills

by | October 6th, 2014 | 10:00 am

While not as endearing as Don Quixote, Treasury Secretary Jacob Lew is every bit as ineffective. Where Don Quixote imagined that windmill blades were the arms of a giant, Jack Lew imagines that US corporations seeking to invert—i.e., sell themselves to a foreign parent firm to escape US taxes—are economic malefactors. The US Congress can […]

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Free Flash Cards for European Commissioner-designate Jonathan Hill’s Remedial Session at the European Parliament (Part II of II)

by | October 3rd, 2014 | 12:04 pm

This is the second part of a piece of complimentary advice to European Commissioner-designate for Financial Stability, Financial Services, and Capital Markets Union, Jonathan Hill, in anticipation of his second hearing by members of the European Parliament’s Committee on Economic and Monetary Affairs next week. The questions are copied from a letter sent to Mr. […]

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Free Flash Cards for European Commissioner-designate Jonathan Hill’s Remedial Session at the European Parliament (Part I of II)

by | October 3rd, 2014 | 12:04 pm

The president-designate of the European Commission, Jean-Claude Juncker, has nominated Jonathan Hill, previously a UK government minister, as commissioner-designate for Financial Stability, Financial Services, and Capital Markets Union. The European Parliament has a veto on the eventual confirmation of the whole Commission and has used this right in the past to request and obtain the […]

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A Good Deal Settles the Brazil Cotton Dispute

by | October 2nd, 2014 | 03:18 pm

A long-running dispute between the United States and Brazil over US cotton subsidies has at last been settled. In an announcement on October 1, the two sides disclosed that their deal has two key terms: The United States will pay Brazil $300 million immediately, for the benefit of Brazilian cotton farmers, and Brazil will drop […]

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ECB Sovereign Bond Purchases Remain Unlikely

by | October 1st, 2014 | 06:41 pm

The European Central Bank (ECB) is reportedly on the cusp of another round of euro area sovereign bond purchases. Proponents of such a move say it is necessary if the ECB is to grow its balance sheet by the €750 billion to €1 trillion signaled by its president, Mario Draghi, on September 4. Yet it […]

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Ten Lessons from the Scottish Referendum

by | September 23rd, 2014 | 08:57 am

The 55 percent majority that rejected Scottish independence was perhaps not so lopsided as to banish all Scottish nationalist dreams of another vote someday. But it was more decisive than many opinion polls had predicted. At least 10 lessons can be drawn from the process. Risk aversion and fear of the unknown works among rich […]

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Mapping Europe’s Banking System: Most Small Banks Are German

by | September 22nd, 2014 | 10:20 am

A well-known limitation of Europe’s banking union is the fact that most banks in the euro area will escape the direct supervision of the European Central Bank (ECB) and the Single Resolution Board that will address insolvent banks next year. Indeed, the ECB’s recently published mapping [pdf] identifies 3,652 banks in the euro area, of […]

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Corporate Taxation: Historic Reform Awaits 2017

by | September 19th, 2014 | 09:44 am

In summer of 1975, J. L. Kramer and I published an article in the International Tax Journal entitled “Higher U.S. Taxation Could Prompt Changes in Multinational Corporate Structure.” Nearly four decades later, our Delphic predictions may be coming true—evidenced by the widespread phenomenon of corporate “inversions.” Inversions—whereby US corporations acquire a legal citizenship abroad by […]

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Rebuttal to Stiglitz on Scotland: Reality of Independence Is Frightening

by | September 16th, 2014 | 01:04 pm

The overwhelming majority of macroeconomists who have commented on the impact of Scotland leaving the United Kingdom have said that the economic costs to Scotland so doing would be very high—I have made this case as well. This professional consensus includes such notable progressives or Keynesian commentators as Paul Krugman and Simon Wren-Lewis. Joseph Stiglitz, […]

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